Transparency and Affordability in Health Care and Prescription Drug Coverage
In the last few years, both the federal and New Hampshire governments have enacted legislation aimed at providing more transparency about the cost of health care and prescription drug coverage, with the goal of reducing costs. These laws have many distinct sections, each of which has a different effective date, and apply to insurers and group health plans such as HealthTrust, as well as providers. This article will provide a brief overview of these efforts and what they mean for New Hampshire’s municipal employers.
Consolidated Appropriations Act
Congress enacted the Consolidated Appropriations Act of 2021 (“CAA”) on December 27, 2020. This appropriations law contains the most significant health care legislation since the Patient Protection and Affordable Care Act (“ACA”) went into effect in 2010. The CAA applies to insurers and group health plans such as HealthTrust with respect to medical and prescription drug coverage, as well as providers. It excludes excepted benefits such as dental coverage and flexible spending accounts (FSAs). Most municipal employers will comply with this law through their group health plans.
The CAA contains the following cost transparency provisions.
- No Surprises Act: This section requires that group health plans (“plans”) must cover emergency services, out-of-network providers at in-network facilities, and out-of-network air ambulance services with the same participant cost-sharing as if the services were in-network and prohibits balance billing for these services. The law also provides for an independent dispute resolution process for out-of-network providers and plans, and requires a No Surprise Billing notice to be posted on the plan’s public website (effective January 1, 2022).
- Other pricing requirements:
- ID cards: Plans must provide out-of-pocket maximums and consumer assistance contact information on ID cards (effective January 1, 2022).
- Provider fee estimate: When a patient schedules a service, providers must, in a timely manner, provide a good faith estimate of charges to the health plan or insurer. (Enforcement delayed.)
- Advanced Explanation of Benefits (EOB) disclosure: After receiving the provider fee estimate, plans must provide the enrollee an Advanced EOB including rate and cost-sharing information. (Enforcement delayed.)
- Price comparison tool required: Plans must make a price comparison tool available on their public website allowing comparison of cost-sharing amounts for specific services, as well as telephone guidance. This requirement does not apply to pharmacy. (Effective January 1, 2023.)
- Gag clauses prohibited: Contracts between plans and providers, third-party administrators (TPAs) and other service providers may not require confidentiality with regard to provider-specific pricing or quality information. Requires annual attestation of compliance (effective December 27, 2020).
- Reporting on prescription drug and health care costs: Plans must submit comprehensive prescription drug and health care cost information to the Centers for Medicare and Medicare Services (“CMS”). First reporting due December 27, 2022 for CY 2020 and 2021; due annually thereafter by June 1.
The CAA also contains the following non-cost provisions:
- Provider Directory Requirements: Plans must verify the accuracy of their provider directories and update at least every 90 days. If the directory is incorrect and an enrollee relies on it, enrollee must be charged as if provider were in-network (effective January 1, 2022).
- Notice of Continuity of Care: Plans must notify enrollees who are “continuing care patients” of their right to continue to receive care from their provider – at in-network cost sharing amount – for 90 days after provider transitions to out-of-network status. (Effective January 1, 2023.)
- Mental Health Parity and Addiction Equity Act (MHPAEA) assessment required: Plans must perform and document comparative analyses of non-quantitative treatment limitations (NQTLs), (effective February 10, 2021).
Transparency in Coverage Final Rule
The Departments of Health and Human Services, Labor, and Treasury (“the Tri-Agencies”) released the Transparency in Coverage (TiC) final rule on October 29, 2020. The rule requires plans to make in-network rates, out-of-network allowed amounts, and prescription drug negotiated rates publically available in three machine-readable files. These files are meant for third-party data analysts and are likely not useable by the public. The network rates files effective date was July 1, 2022; enforcement of the prescription drug files has been delayed.
The TiC final rule also requires plans to provide accurate cost-sharing and rate information regarding medical items and services (not pharmacy) to enrollees on a searchable, internet-based self-service tool. This section is effective for plan years beginning on or after January 1, 2023 for 500 medical items and services and January 1, 2024 for all covered services.
New Hampshire Prescription Drug Affordability Board
The New Hampshire legislature enacted NH RSA 126-BB in July 2020, which provided for the establishment of the New Hampshire Prescription Drug Affordability Board, a panel of experts in health care economics and clinical medicine. The Board works together with a governmental advisory panel to establish annual spending targets pursuant to RSA 126-BB:5, I and determining methods for meeting those spending targets pursuant to RSA 126-BB:5, III. Prescription Drug Affordability laws have been enacted in six states so far, and are a growing trend in states’ efforts to understand and reduce prescription drug costs. Other efforts by states include California’s recent announcement that the state will start producing its own insulin.
The New Hampshire law requires submission of the payor’s prescription drug data to the board, including:
- Expenditures and utilization data for prescription drugs for each plan;
- The formulary for each plan and prescription drugs common to each formulary;
- Pharmacy Benefit Manager (“PBM”) administrative expenses; and
- Aggregate net spending on the prescription drug benefit.
Additionally, the Board is tasked with determining whether certain methods reduce costs to individuals and payors. These methods include:
- Negotiating specific rebate amounts ;
- Changing formularies;
- Prohibiting the offering of more expensive formularies;
- Purchasing drugs in bulk or through a single purchasing agreement for all public payors;
- Collaborating with other states for drug purchases;
- Allowing private payors to include small group private businesses for a fee; and
- Procuring expert services as necessary.
What New Hampshire Municipalities Need To Know
As health care and especially prescription drug costs continue to rise, it is important for municipalities to be aware of the various efforts both federally and at the state level to gain transparency into health care and prescription drug costs, and to be aware of the tools that exist for consumers and employers, as well as health care risk pools. This awareness has the potential to reduce costs in the long run, as consumers, employers and payors have a better understanding of cost-drivers and their rights and responsibilities. Employers should check with their group health plans to ensure that plans are complying with the Consolidated Appropriations Act on their behalf. HealthTrust Members should be sure to visit the HealthTrust website often for updates on complying with these laws.
Erica Bodwell is the Benefits and Coverage Counsel for HealthTrust.